Thomas Thune Andersen, Chair of Ørsted, a Danish energy company with a market cap of $26.8 billion, assumed his new role in 2014, just before the company began its IPO process.
With Ørsted’s history as a state-owned company (formerly known as Dansk Olie og Naturgas and Dong Energy) in the process of a strategic shift from traditional to green energy, Andersen needed to rethink the composition of the board. He initiated a competency analysis, which revealed a need for new financial and technological expertise as well as much more diversity, and prioritized candidates with all the right attributes. It wasn’t easy: “Our commitment and focus was important,” he says. “We needed to look internationally and we had to dig deep and invest time in the search to get the profiles we wanted.”
Now, Ørsted’s eight-person board boasts three women who also bring new international and functional experiences, and Andersen sees much positive change. “You need critical mass in order to see and feel the difference,” he says. “I have learned that if you have a minimum of three executives from whatever minority group, the differences start to gain momentum and pay off.”
Andersen also cautions that increased diversity can lead to increased complexity — both for the board itself and for the chair, who must be aware of the challenge of leading a group that may have widely different perspectives. “The homogenous board can be efficient but not necessarily effective,” he says. On the flip side, “If not managed well,” Andersen says, “diversity can drive unnecessary complexity.” The key is to leverage that complexity by drawing the best ideas out of informed debate.
Andersen says his recipe for leading a diverse board is “to show respect, be a good listener, invest time in understanding the individuals, and remember your sense of humor.” He continues: “I sit in the middle of the table, and I do not look for efficiency, but for effectiveness.” Discussions may take longer with a diverse board, he says, but they also lead to better decision-making.